Fast-Thinking Attention and the Disposition Effect

Graduate Thesis Or Dissertation

Citations

Citeable URL: https://scholar.colorado.edu/concern/graduate_thesis_or_dissertations/9k41zf97n

Abstract

The disposition effect is the tendency of investors to sell stocks that have recently increased in value and hold stocks that have recently decreased in value. Although some evidence suggests that investor attention mitigates the disposition effect, this study finds that a certain type of attention—fast-thinking or “System 1” (Kahneman 2011) attention—has the opposite effect. I examine the disposition effect in investors who are presented with push notifications from the Robinhood brokerage, which I contend generates fast-thinking attention, and find that these notifications exacerbate the disposition effect. My results suggest that fast-thinking attention is detrimental to investors.

Creator